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ARTICLE · 12 DECEMBER 2017

Validity Of Non-Compete Clause In An Employment Agreement

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The Constitution of India, in accordance with Article 19 (1) (g), confers on each and every citizen with the fundamental right to practice any profession, or to carry on any occupation, trade or business.

IndiaEmployment and HR
Rupin Chopra
Rupin Chopra
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Introduction:

The Constitution of India, in accordance with Article 19 (1) (g), confers on each and every citizen with the fundamental right to practice any profession, or to carry on any occupation, trade or business. This right, however, is not absolute in nature and is subject to reasonable restrictions. One such restriction is the non-compete clause in an employment agreement.

Importance of non-compete clause:

A company endeavors to protect its business, safeguard its confidential information and the sensitive business knowledge bestowed upon its employees. If an employee quits and starts a competing business in the same area as the company then it possibly translates to the employee using the knowledge gained from the company to hamper the company's business. Therefore, it is a common practice by companies to include a non-compete clause in the employment agreement with their employees in order to ensure the protection of their business.

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